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Greece Debt Crisis - Is India Insulated

2015-07-07Posted By:Infrabazaar

When borrowers — whether they are countries, companies or individuals — do not pay their debts on time, they are in default. For practical purposes, then, Greece — which on Tuesday failed to make a scheduled debt repayment of about 1.5 billion euros, or $1.7 billion, to the International Monetary Fund — has defaulted.

The I.M.F., however, does not use the term default. It instead places countries that miss their payments in what it calls arrears.

Greece Debt Crisis

With the debt crisis beginning in 2010 in Greece, international banks and financial investors had pulled out their Greek bonds and other holdings, rendering them insulated from the Greek economic changes. Private investors, who did not pull back, however have hard times ahead. Greece now owes European countries and international bodies €340bn borrowed over the past five years. To afford the debt repayments, Greece made huge cuts leaving many impoverished.

Euro Impact

The other countries in the Eurozone-Portugal, Ireland and Spain-who are debt ridden have taken steps to overhaul their economies and are less vulnerable now.

Despite that, Greece's crash is believed to create ripples that cannot be predicted until the last moment even though early symptoms of a crack in the Euro valuation is visible, which has been dropping sharply since the crisis begun. With the shutting down of Greece's ailing banks to avoid further harm, the cash withdrawal has been limited to $66 per day and people with cash and credit issued in other countries have been exempted from the withdrawal limit.

Is India Insulated?

Having understood the crisis it is also imperative that we also should understand are we insulated? Can India afford to be complacent?

Here is what the chief economic adviser to the Government of India in the ministry of finance, Arvind Subramanian, told reporters on Monday: "This is a drama which is going to play out for some time. We are well protected in at least three ways. Our macro-economic situation is much more stable. We have (foreign currency) reserves. We are an economy which is still a very attractive investment destination. So I think we are relatively well insulated."

The truth is that economies across the globe, including the Indian economy, are going to be adversely affected by the events of the last few weeks and the events that will follow.

However, India has somewhat consistently performed much better with regard to macro-financial stability relative to the rest of the world. Banks seem stable in India but a currency crisis cannot be ruled out, the current account deficit is too large by some yardsticks. On the contrary Reserve Bank of India (RBI) had been holding large foreign exchange reserves relative to gross domestic product (GDP) which can avoid a currency crisis.

The government goes in for somewhat regular bailouts in different forms such as assistance for airline companies, loan waivers for farmers, protecting existing banks by putting barriers to entry for new ones, etc. Such bailouts can mitigate a financial crisis but they have high costs associated with them. The growth rate in India in the last two decades has been high by international standards, and by India’s own historical record.

To summarize, current policies do mitigate a financial crisis. There could be problems but India is a land of opportunities and with its growing economy, we should be insulated from a Greece like crisis.

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Incepted in the year 2012, Infra Bazaar is the first of its kind market place for manufacturers, service providers and traders across the Infrastructure domain. With the vision of creating an Ecosystem for Infrastructure domain, we at Infra Bazaar are fostering innovation to add value to the Infrastructure industry through online portal, data research and mobile apps. We are committed towards making real and lasting solutions for the infrastructure industry that can disrupt and bench mark materials / equipment sourcing and equipment hiring via mobile and online medium.

Why InfraBazaar?

Internet and Mobile Technology has made world smaller. With a simple hand held device we can reach millions of customer worldwide. Leveraging on these modern technologies, business can now increase its reach to consumers. Individuals remain connected to their Network; Buyers to Sellers and vice versa. Keeping in view the present and future needs of Infrastructure Industry we provide scalable and customized solutions for asset management, disposition and valuation. We strategize and devise solutions for large construction houses, civil contractors, dealers, bankers, NBFC’s and all stake holders of Infra Business.

Leveraging on Technology

We cater to the Infrastructure Industry in digital platforms both Web and Mobile. With our expertise in Infra Business we have created niche platforms leveraging on technology. The web and mobile platforms provide every possible solution for the Infra Industry. We have created distinct verticals for Equipment Sourcing and Disposal, Material Sourcing, Auctions and Reverse Auctions. Mobile apps are today part of every conceivable business, irrespective of their size or services they offer. Our Mobile app and catalogue management system specifies distance of the product, pricing and description. Our App is live on all 3 platforms Android, Windows and IOS.

Opportunity

With India alone looking to invest close to $1 Trillion over the next 5 years in Infrastructure and globally it is a $57 Trillion Industry, opportunity in this sector stands enormous. We aspire to be the game changers and intend to get benefited just by making this unorganized sector organized. We look forward to be the world’s first Equipment pooling company, cutting down costs drastically on Heavy Equipment spend. With the ever increasing consumer base and market acceptance we not only foresee a huge demand for our services but also foresee an opportunity to contribute positively in restructuring the Infrastructure domain as a whole.

OUR SERVICES

Used Equipment Disposal

Our asset management solutions, with its operations spread across India is now well-known among large construction houses. So far we have been instrumental in disposing close to $10 Million of surplus assets from various construction houses. With our high ethical standards and excellent services, we are now counted among the best in this space.

New and Used Equipment Sourcing

We intend to offer a wide array of Heavy Machineries to our buyers. The selection of a machine for a specific job is not merely a question of economics but much beyond. Keeping in view the demands of a buyer to do the job efficiently and economically, we source viable construction equipment depending upon its availability.

Equipment Rentals

In times where companies have to demonstrate high levels of profit compared to invested capital, contractors are increasingly eager to rent equipment, it allows them to minimize the size of their equipment fleet. Less immobilized capital, allows for improved cost control, lower maintenance costs as well as for reduction in transportation fleets. Renting equipment with operators even allows for optimizing staff costs. We have ambitious plans to have at least 3000 Equipment to be made available for rent by the year end.

Auction and Reverse Auction Platform for Disposal and Procurement Respectively

Our world class Auction platform available both in Mobile and Web has seen tremendous success. So far we have auctioned more than $1 Million worth of asset and scrap in just last 6 Months. We are acquiring new customers at a very fast pace those who want to use our auction platform. The reverse auction (e-procurement) vertical is just taking off and we have conducted several reverse auctions helping companies save millions in procurement.

Material Sourcing and Display

Our material display and catalog management system is a single repository of all information needed to create and manage a product in the offering. It contains the relevant commercial information and specifications. With open access information, the catalog is available to all potential buyers who can access existing or add new ones to the library.

Finance

The sale of construction equipment in India is expected to grow to 1 Million units by 2020 and so will be the demand for financing them. We at Infra Bazaar have tied up with several industry leaders for used heavy equipment, plant and machinery financing and re-financing.

Valuation

Our team of appraisers is fully equipped to conduct inventory appraisals, site inspection appraisals and desktop appraisals. We have catered to several industries in valuing used and capital assets. We provide unbiased opinion of value or other physical attributes of the identified asset. Value, on the other hand, is the monetary worth of asset, goods or equipment.